Saul Company purchased a tractor at a cost of $120,000 on January 1, 2019. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years.
If Saul uses the straight-line method, what is the book value at January 1, 2023?
A) $70,000
B) $50,000
C) $82,500
D) None of the above

Question

Quizplus · Accepted Answer

Accumulated depreciation = [($120,000 - $20,000) / 8] × 4 = $50,000
Book value = $120,000 - $50,000 = $70,000

Saul Company Purchased a Tractor at a Cost of $120,000